Multi-Family properties in Boca Raton, Delray Beach, West Palm Beach and Boynton Beach have become absolutely excellent investments ever since the mortgage crisis back in 2008. Let me tell you why.
With the flood of homeowners being foreclosed upon demand for rentals has shot up and so have the rents. Helping you find a multi-family rental property that cash flows is one of my favorite things I do as your favorite South Florida Real Estate agent.
A multi-family property needs to be analyzed like a commercial loan. It is a commercial loan if you need financing. That means you should be prepared to put down a minimum of 25-30% of the purchase price on the multi-family property if you apply for a mortgage. While 4 units or fewer may be considered to be residential mortgage, five and above is considered a commercial with a whole new set of hoops to jump through.
In these situations, if you are searching for financing, I would like to refer to you my friend and colleague Preston Ware over at www.Prestonware.com . He is a Florida mortgage Banker with 20 years experience. 561-329-0075
From 2006 – 2010, on a nationwide basis, the number of households renting increased by 3.4 million, while those owning homes decreased by more than 1 million. In South Florida, where foreclosures continued unabated, thousands of families losing homes moved into middle and high-end rentals and multi-family properties in record numbers.
In addition, the prices of rental apartments began to move upward and vacancy rates decreased. At present, it is estimated that there are more than 39 million rental households in the United States.
However, despite this minor increase in building, the Joint Center for Housing Studies states that demand for rental units between 2010 and 2020 will increase by 360,000 and 460,000 families every year. Unless multi-family property housing starts rise dramatically, we are likely to be short by 200,000 rental units yearly.
Because of this increasing demand for rental units, some cities have recently experienced dramatic rises in rent. Austin, TX saw rents move up an average of 17%, while Boston saw some rents jump by close to 30% this year. According to the Census Department, double digit increases are on their way to most cities because of lack of available multi-family property rental units. Vacancy rates in our area have hovered around 10%, but economists predict that these rates will drop to 5% by 2012, which, or course, adds up to higher rents. Partly as a result of this trend, South Florida’s median rents are running well above $939.
The National Association of Real Estate Editors predicts that rental rates in multi-family property across the board should rise between 3.5 and 4.5% during 2011. Much of this increase will come from the 1.2 – 2.2 million people who will change their status from owners to renters as they lose their homes due to foreclosure.
Please give me a call at 561-213-6139 and I will put my 10 years of experience as your favorite multi-family real estate agent in South Florida into action.